Life Insurance: Recent Trends in LTC

Research evidence excerpt

Life Insurance: Recent Trends in LTC

Equity Research

Industry Update — June 9, 2026

Life Insurance

Waiting on a Transaction with Bated Breath

Our Call Wes Carmichael, CFA

Long-term care represents a ~$200b liability for the industry and we expect to see Equity Analyst | Wells Fargo Securities, LLC

Wesley.C.Carmichael@wellsfargo.com | 212-214-5335

more de-risking transactions going forward. UNM is best positioned to capitalize on risk

transfer, but should also continue to benefit from GLTC lapse in the meantime.

Industry LTC reserves total just under $200b on a gross basis. Long-term care has long

been a headwind for the industry, but we've seen several transactions over the past few

years that have given investors hope the industry's exposure (and valuation pressure from

the product) can be reduced. This is most important for Unum, in our view, and we do

expect the company to exit exposure over time. As such, we continue to highlight UNM

(OW, $87.02) as among our top picks.

Expecting a UNM LTC transaction in the near term. While these deals take time, we

expect we could see a transaction announcement from Unum in the near term. The buyer

universe for LTC risk remains limited, particularly around the biometric risk aspects, but

it's been over 15 months since the company last announced the $3.4b transaction with

Fortitude Re (and a "global reinsurer"). Over time, Unum is trying to effectively completely

exit the product line, and capital flexibility is ample.

UNM's GLTC terminations are likely to continue. Unum mgmt has a line of sight into

terminations for GLTC post 1Q, including employer inquiries and a handful of advance

notifications. While it's difficult to predict timing of terminations, mgmt has indicated